Letter to the Editor: Not everyone is celebrating Grand Reopening of the Masonic building
I write in response to the article “City Celebrates Grand Reopening of the Masonic building.” (Malden Advocate, 11/16/18, pg. 1.) Not everyone is celebrating, and an inside view of the facts may explain why. November 15 marked the opening of yet another apartment building in Malden, only this time the taxpayers gave the developer a $2 million tax break to build it. Malden is a magnet for apartment developers, so clearly there is no need to pay them to develop market-rate apartments here. Apartment developer tax discounts were only made possible as a funding tool to afford a new City Hall, and then it was cleverly exploited.
In 2015, when Malden was searching for funds to pay for a new City Hall, it adopted a state law designed to help cities and towns that had difficulty attracting developers. The “Housing Development Incentive Program” (M.G.L. ch.40V), allows communities to create an “HD Zone” where future taxes could be reduced for up to 20 years as an incentive for developers to build. Malden created its HD Zone around the City Hall site. At the same time, the prospective City Hall purchaser agreed to give the City present day dollars in exchange for reduced future taxes. The net effect did not cost the City, or the purchaser, any money; it merely accelerated future tax payments that the City could spend sooner to help pay for a new City Hall.
Although the HD Zone was adopted specifically to afford a new City Hall, shortly thereafter, the Mayor lobbied for an HD tax discount for a building recently purchased by former State Senator Jack Brennan. It was no coincidence that Mr. Brennan’s building happened to fit within the Mayor’s boundaries for the HD Zone, as the Mayor had recently helped Mr. Brennan buy it. In 2013, the Mayor filed a lawsuit against the former Masonic Building owner to compel roof repairs. Instead of going through the Problem Properties Unit, and our City attorneys, the Mayor took the unusual step of spending $28,000 on outside attorneys to threaten the owner with receivership and foreclosure. The suit was vigorously pursued until the building was sold to Mr. Brennan for $1.2 Million. The sale price was $900,000 under assessed value, and far less than would have been realized if publicly marketed for sale in the red-hot real estate market.
Unlike the City Hall deal, which called for the City to receive tax payments ahead of schedule, the deal with Mr. Brennan was an outright gift of $2 Million to a market-rate apartment developer, with no financial return to the tax payers. Also, unlike the City Hall deal, which was negotiated as part of the purchase, Mr. Brennan had already purchased his building, and therefore did not need an incentive to buy it, or develop there, as he was already doing it. The Mayor explained that the incentive was needed to save a historic building from demolition; however, Mr. Brennan had already put $100,000 into repairing and updating the existing structure, not demolishing it. Meanwhile, the Mayor also delayed acting on a local ordinance passed by the City Council to protect historic buildings.
To a working-class community like Malden, losing $2 Million of revenue puts additional strain on our ability to fund public safety, education and other services. To saturate our community with market-rate apartment buildings, and then give away the fair share of taxes developers are meant to generate, is just plain wrong. For these reasons, I opposed the Brennan tax gift, and introduced legislation to protect historic buildings and end the practice of apartment building tax discounts. This would be a real reason to celebrate.
John P. Matheson, Malden City Councilor